The revised design of the new airport terminal is progressing, bids are being sought for subcontractors, representing some $5 million in estimated work, and for the first time the state has put its share of the funding on a capital improvements list.

Even so, the questions raised at town hall over the past two years about the business plan in support of the project remain.

Town Manager John Klimm said that his discussions with Airport Manager Bud Breault and members of the airport commission remain consistent.

“Short of a letter of commitment from state and federal government, I don't see it happening,” Klimm said in an interview Aug. 27.

When all funding sources are identified, the airport will then submit a request to the town to front the funds for what remains of the $32 million project. The understanding to date put that figure in the $2-plus million range, but is subject to change based on the outcome of a new financial analysis of airport revenues, due shortly.

There is another arrangement that the town would consider in fronting funds for the project, according to Klimm. Added to that discussion is the concept of a pledge of assets to secure the town's investment. More specifically, the town would accept a pledge of land as collateral against the town’s loan.

Breault isn't sure what the airport can do in that regard. It does have land holdings outside of the airport fence, including the land on which the Capetown (Kmart) plaza sits, among others, but Breault said it's unclear what the airport is allowed to pledge.

The ongoing discussion on how to improve the Yarmouth Road gateway into Hyannis could involve a new roadway on airport property, which could come into play, Breault said, but much of that remains under review.

What Klimm and town finance officials want to avoid is the repayment of any borrowing falling back on taxpayers. Klimm said that he understands the airport is reworking the business plan, but it’s nothing he and finance director Mark Milne have seen.

There has been movement on state funding, with the Massachusetts Aeronautics Commission placing $13.1 million on its 2010 capital improvements plan. Of that amount, $4.7 million was appropriated in the 2010 state budget.

Breault said that while it's not the entire amount, it represents the first time the terminal funding has made it to the CIP and funding for the construction portion has been appropriated. Breault will meet with MAC and Federal Aviation Administration officials in two weeks to review the capital improvements plan.

In late 2007, MAC did authorize $1.7 million in design funds, which was part of its $15 million overall commitment.

The airport is awaiting the results of a financial analysis of all revenue sources, including operations, lease and parking receipts. Breault said that the airport will look to that analysis to quell the town's continuing concerns about the business plan supporting the terminal project.

At its Aug. 18 meeting, the airport commission agreed to adopt a $1 passenger facilities charge starting next spring. That could add $160,000 or more annually dedicated to the terminal project.

An appropriation could be presented for town council consideration in November.

Breault said that the financial commitment already made toward the project, from design, land acquisitions, business relocations and the new access road, will be roughly $10 million.

“There is a significant commitment to this project and we want to see it through,” Breault said.

He said that the airport is being told that the state and federal entities are likewise committed, but that has yet to be put in writing.